If recent trends and releases are to go by, most Australians will likely be driving an EV sooner rather than later.

There are many signs pointing to electric vehicles. Some from the climate, some from manufacturers, some from governments and some from consumers themselves.

We take a look at the rise and rise of EVs and find out why you could be driving one soon.

Dirty numbers: The transportation industry contributes roughly 16% of all the world’s greenhouse gas emissions.

Breaking that figure down further:

Rail makes up only 1%
Cargo / cruise ships, 10%
Aviation adds another 10%
Trucks / busses make up 30%
Others make up 2%
Cars and motorbikes equal 47%

In other words, 7.5% of all global emissions are coming from passenger vehicles.

As predicted by the International Energy Agency, the number of vehicles in the world will likely more than double by 2060.

Electric vehicles offer a clear solution in bringing down global emissions.

EV carbon footprint cost during production

Volvo is an interesting case study. While the brand produces ICE (Internal Combustion Engine) vehicles as we all know, Volvo-owned Polestar is an all-electric vehicle producer with an Australia-bound model.

2021-Polestar-2

(Australia bound: The Polestar 2)

The ‘Polestar 2’ is an EV set for sale in Australia by the end of 2022.

Comparing the 2.0L 4-cylinder petrol-powered Volvo XC40 to the Polestar 2 in production emissions:

  • Polestar 2: 26 tons of CO2
  • Volvo XC40: 14 tons of CO2

After around 3.75 years (50,000km) of driving for the average Australian, the XC40 will have equalled the Polestar 2 in CO2 emissions. Note that the average vehicle in Australia is aged 10.4 years.

But EVs don’t run off renewables only.

The average petrol engine vehicle consumes around 9.97 litres / 100km.

Charging a Tesla Model 3 from fossil fuel-generated electricity equals around 4.28 litres / 100km in terms of emissions. Charged from average greener electricity, the Model 3’s emissions drop down to 1.63 litres / 100km and approach zero when using solar and wind.

EVs around the world

Norway leads the world when it comes to EVs. Comparing EVs to people, the country boasts 18.9 people per electric car.

USA – 46.8 (people / EV)
Iceland – 72.6
Sweden – 76.7
Netherlands – 141.4
Australia – 1,265

Other countries with influential auto markets and EV plans

South Korea: EVs account for 30% of auto sales by 2020 / No diesels by 2025.
Germany: No registration of ICE (Internal Combustion Engine) vehicles by 2030.
France: No new ICE vehicles sold after 2040.
UK: No new ICE vehicles sold after 2040.

With many countries around the world, such as Goliath markets like the US and China, offering EV incentives, Australians likely won’t have ICE (Internal Combustion Engine) options for long.

Manufacturers well aware of where the market is heading

Below are some brands and their plans for EVs which position themselves in line with consumer demands and government initiatives.

Ford – all passenger cars in Europe to be EV or plug-in hybrid by 2026
Volkswagen – producing one million EVs a year by 2023
Nissan – seven EV models by 2022
Honda – 66% of sales to be EVs by the end of 2030
Mercedes – EV versions of all its models by 2022
Jaguar – all electric by 2025

Note, these brands originate from countries that have a large influence on the auto market – Japan, Germany and the US respectively.

The impact on the Australian market

The result will benefit consumers with a likely decrease to the price of EVs. As more brands step into the EV market, the more models Australian consumers will have access to.

At present, the number of EVs on Australian roads totals around 21,000. The graph below shows cumulative EV sales vs EV sales by year.

Cumulative EV sales vs EV sales by year

(Data sourced from VFACTS)

Australia doesn’t have much of a history of EV incentives but there is (hopefully) change on the way.

In February this year, coinciding with US President Joe Biden’s plans to reduce emissions, the Australian Government released a discussion paper called the “Future Fuels Strategy”. The paper lists the government’s interests in:

  • Co-investing with the private sector in EV charging infrastructure
  • Options for managing potential congestion on the electricity grid
  • EV fleet trials for COMCAR (the provider of cars and drivers for politicians)

Unfortunately for EV enthusiasts, the following is not included:

  • Minimum fuel emissions standards
  • EV sales targets
  • Financial incentives for consumer EV purchases

But there are existing state government EV subsidies

Residents from Queensland, the ACT and Victoria can take advantage of the following:

Queensland

  • Stamp duty discounts of $2 per $100 up to $100,000 and $4 per $100 for more than $100,000 priced battery electric vehicles.
  • ICE vehicles priced below $100,000 incur a stamp duty of $3 – $4 per $100 depending on the number of cylinders, or $5 – $6 for cars costing more than $100,000.

ACT

  • No stamp duty is charged for new EV purchases.
  • Free registration for the first two years for EV drivers.
  • Zero-interest loans of up to $15,000 to help with the costs of purchasing zero-emission vehicles.

Victoria

  • Stamp duty rate exemptions on vehicles that emit less than 120g/km of carbon. However, this is not applicable to vehicles costing below $68,740. Depending on the trim level, a Tesla Model 3 will just scrape in.
  • EVs and hybrid vehicles receive a $100 annual discount on vehicle registration.

As many Victorians are quick to point out, a hundred bucks a year isn’t much.

EV price forecasts

Many motorists in Australia know the [inflated] purchase cost associated with EVs. Fortunately however, as BloombergNEF’s annual battery price survey confirms, EV battery prices are coming down. Priced per kilowatt-hour, Lithium-ion batteries have dropped by 89% from US$1,100/kWh in 2010 to US$137/kWh in 2020.

In fact, by 2025, in the US and Europe, new EVs will be cheaper to buy than equally-spec’d ICE-powered vehicles. This is further exacerbated by government tariffs on emissions.

Batteries currently account for around 50% of an EV’s total cost.

Amazingly, despite the cost, Tesla has recorded a huge number of buyers making down payments before even seeing a new model, let alone test driving one. Tesla offers online vehicle sales with self-service technology, quite a gamble in the car industry but one that has paid off.

Tesla, at present, is worth around US$700bn, making the company worth more than Toyota, Volkswagen, Hyundai, GM and Ford… combined.

EVs in Summary

Due to international pressure from governments around the world reducing their emissions, consumer trends and manufacturers vying for sales, EVs are making tracks on Australian roads.

Boosted by the slow-but-existent incentives in Australia, huge popularity and more affordable prices at home and abroad, Australians can expect to see increasing numbers of EVs on the roads.

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